Why Wall Street cheered April’s mixed-bag jobs report

Wall Street cheered a mixed-bag April jobs report on Friday — buoyed by a drop in the unemployment rate to 3.9 percent, its lowest level in more than 17 years.

Stocks moved broadly higher even though the 164,000 jobs added during April missed forecasts.

April marked the 91st consecutive month of job increases.

The bad-news-is-good-news result is based on investors’ belief that a less-than-roaring US economy will keep the Federal Reserve from making four rate hikes in 2018.

As rates move higher, investor cash can get siphoned from stocks to bonds.

This was a “Goldilocks jobs report,” Mona Mahajan, US investment strategist of Allianz Global Investors, told The Post.

The Dow Jones industrial average closed up 332 points, to 24,263.

The low unemployment rate may have spooked markets but the slowdown of new jobs added, coupled with tepid wage growth of 2.6 percent over the last year, calmed investor worries that the Fed will aggressively raise interest rates to cool off an overheating economy.

The Fed has earlier telegraphed three rate hikes for the year. The first hike occurred in March.

But analysts think that the latest figures, which showed a slight slowdown in wage growth, will prevent the Fed from acting too aggressively.

“If I were the Fed looking at this [report], I would not be in a rush to raise rates,” Mahajan said, adding that a fourth rate hike was off the table.

Other gainers on the blue chip index were McDonald’s, which climbed 3.1 percent and The Walt Disney Company, which popped 2.4 percent. Chevron, which fell 0.4 percent Friday, was the only Dow component to end the day lower.
The broader markets also saw green Friday with the S&P 500 and Nasdaq gaining 1.3 percent and 1.7 percent, respectively.

Despite the ebullience on Friday, both the Dow and the S&P closed down for the second straight week.

”We’re seeing a little bounce-back after the last few weeks,” Mahajan said, citing strong corporate earnings and yields on the 10-year note falling back below 3 percent as positive indicators for the stock market.

“This is in line with people saying the Fed doesn’t have to be as aggressive,” she added.

Spartan Capital Securities

Name

FirstLast

Email

Phone

Leave your comments here

Captcha

This website stores cookies on your computer. These cookies are used to collect information about how you interact with our website and allow us to remember you. We use this information in order to improve and customize your browsing experience and for analytics and metrics about our visitors both on this website and other media. To find out more about the cookies we use, see our Privacy Policy.Ok